Feb. 1 (Bloomberg) -- Teva Pharmaceutical Industries Ltd.
is driving the best start of the year for Israeli stocks since
1997 as the drugmaker soothed concerns about new revenue sources
by replacing its chief executive officer.

Israel’s benchmark TA-25 Index climbed 3.1 percent to
1,119.50 in the first month of 2012, the biggest January gain in
15 years, after tumbling the most in eight months in January
2011 as uprisings throughout the Middle East deterred investors.
The gauge rose 0.3 percent to 1,123.16 at the 4:30 p.m. close in
Tel Aviv today. The Bloomberg Israel-US 25 Index of the largest
Israeli companies traded in New York rose 9.3 percent last
month, as Teva, the world’s largest maker of generic drugs,
surged 12 percent in New York, the biggest monthly gain since
2007.

Stocks are rebounding from declines in 2011 as signs of
progress in Europe’s debt crisis boost the outlook for one of
Israel’s biggest trading partners. Teva said on Jan. 2 that
Jeremy Levin, formerly of drugmaker Bristol-Myers Squibb Co.,
will replace Shlomo Yanai as chief executive after U.S.-traded
shares plunged 23 percent last year, the most since 2006.

“Teva has had a nice run since the announcement of a new
CEO and the outperformance has helped the index,” Jonathan
Kreizman, an analyst at Clal Finance Brokerage Ltd. said in an
interview from Tel Aviv yesterday. “The Israeli market was hit
hard last year by the uprising in Egypt.”

Levin’s Acquisitions

Levin, formerly senior vice president for strategy at
Bristol-Myers Squibb, may help Petach Tikva, Israel-based Teva
find new sources of revenue to replace sales lost as the
company’s best-selling medicine, the multiple sclerosis
treatment Copaxone, faces increased competition, according to
Kreizman.

Investors are concerned that competing drugmakers will
erode the company’s market share as the patent for Copaxone
expires in two years. Sales of the treatment, which accounted
for 24 percent of Teva’s revenue in the third quarter, will
probably peak this year at $3.8 billion, the company said on
Dec. 21. Sales were $3.32 billion in 2010.

Bristol-Myers made 17 acquisitions over four years with
Levin, the former senior vice president of strategy, alliances
and transactions, including the 2009 purchase of Medarex Inc.,
which saw the company gain the Yervoy skin cancer drug.

Teva Target

The Nes Ziona, Israel-based developer of proteins may be an
acquisition target for Teva, as Levin looks to boost the
company’s branded drugs portfolio, said Raghuram Selvaraju, an
equity analyst at Morgan Joseph TriArtisan Group.

“Levin’s background will enable Teva to buy companies like
Prolor that would fold particularly well with the company,”
Selvaraju said.

MagicJack VocalTec Ltd., the Israeli company whose founders
invented the technology used to make phone calls over the
Internet, was the second-biggest gainer on the index last month,
increasing 41 percent.

The company was rated “outperform” in initial coverage by
Oppenheimer & Co.

“We expect MagicJack to further expand its range of
devices and services and to see sustained revenue and earnings-per-share growth” of more than 20 percent a year, Timothy
Horan, an analyst at Oppenheimer in New York, wrote in an e-mailed report dated Jan. 30.

IBM Buyout

Israel, whose population of 7.8 million is similar in size
to Switzerland’s, has about 60 companies traded on the Nasdaq
Stock Market, the most of any country outside the U.S. after
China. The nation is also home to more startup companies per
capita than the U.S.

International Business Machines Corp., the world’s biggest
computer-services provider, said yesterday that it’s acquiring
Worklight Inc., the provider of a mobile application platform
for smartphones and tablets whose research and development is
based in Shefayim, Israel.

The announcement comes three weeks after Apple Inc. said
that it acquired Anobit Technologies Ltd., an Israeli company
that makes flash-memory drive parts for the iPhone and iPad.

CEVA Inc., a developer of the chips used in smartphones and
tablets with most of its operations in Israel, sank 3.8 percent
to $27.01 yesterday, extending its decline in the month to 11
percent.

The company told analysts on a conference call that it
expects first-quarter earnings-per-share of 20 cents to 22
cents, below the 24-cent median estimate of 11 analysts surveyed
by Bloomberg.

“The company reported weak guidance for the year,” Andrew
Uerkwitz, an analyst at Oppenheimer in New York, said by phone.
“Investors wanted to see more than that.”